Plan Pricing Basics

College planning begins with a single question: “What is the right college savings plan for my child – and for my budget?” The Texas Tuition Promise Fund created three pricing levels (“Tuition Unit Types”) to address the different needs of young Texans and their parents.

What Is a Tuition Unit and What Does it Buy?

Tuition Units represent a fixed amount of undergraduate resident tuition and required fees charged by Texas public colleges and universities.

Sales prices change September 1 of each year. Tuition Unit prices for the 2014-2015 enrollment period are:

Type I = $118.06
Type II = $89.42
Type III = $22.23

Check out the pricing guide for up-to-date costs. At the back of the pricing guide, you will find information on the number of each type of tuition unit necessary to cover one academic year’s tuition and required fees at Texas public colleges and universities.

TYPE I Units

100 units = 30 semester hours = One academic year at the most expensive Texas public college or university

TYPE II Units

Should your budget not allow for Type I Units, you may want to consider the less expensive Type II Tuition Units. Type II Units can be redeemed to pay the Weighted Average cost of undergraduate tuition and required fees charged to full-time in-state students at four-year public colleges and universities in Texas.

Purchasing Power of Type II Units

No matter how high tuition costs have risen in Texas, if your child attends a Texas public college or university that is at or below the Weighted Average cost of tuition when your child starts college, 100 Type II Tuition Units will fully cover tuition and required fees for 30 semester hours. The actual “purchasing power” of Type II Units will vary depending on the college or university your Beneficiary attends and the extent to which its costs are above or below the Weighted Average cost at four-year Texas public institutions.

Because Type II Units represent the Weighted Average cost of tuition and required fees at Texas public four-year colleges or universities, some will require more than 100 Type II Units and some will require less than 100 Type II Units for one academic year (30 semester hours) of undergraduate resident tuition and required fees. If the cost per semester hour at your child’s school is higher than the Weighted Average cost of tuition and required fees, or if your child takes more than 30 semester hours, you will have to use more Tuition Units or pay the difference. However, if the cost per semester hour at your child’s school is lower than the Weighted Average cost of tuition and required fees, the unused Tuition Units will remain in your account for future use or they can be refunded or transferred to another qualified Beneficiary.

TYPEIII Units

The least expensive of the three unit types, Type III Units can be redeemed to pay the Weighted Average cost of in-district undergraduate resident tuition and required fees at two-year public colleges in Texas charged to residents of the taxing jurisdiction of the two-year public college.

Purchasing Power of Type III Units

As with Type II Units, no matter how high tuition has risen in Texas, if your child attends a Texas two-year public college that is at or below the Weighted Average cost of tuition and required fees at all Texas two-year public colleges when your child starts college, 100 Type III Tuition Units will fully cover tuition and required fees for 30 semester hours assuming your child resides within the taxing jurisdiction of the college.

Because Type III Units represent the Weighted Average cost of tuition and required fees at Texas two-year public colleges, colleges above the Weighted Average cost will require more than 100 Type III Units and colleges below the Weighted Average cost will require less than 100 Type III Units for one academic year (30 semester hours) of undergraduate resident tuition and required fees. Redemption value assumes your Beneficiary resides within the taxing jurisdiction of the Texas 2-year public college. If the cost per semester hour at your child’s school is higher than the Weighted Average cost of tuition and required fees, or if your child takes more than 30 semester hours, you or the Beneficiary will have to pay the difference. However, if the cost per semester hour at your child’s school is lower than the Weighted Average cost of tuition and required fees, the unused Tuition Units will remain in your account for future use or they can be refunded or transferred to another qualified Beneficiary.

The Tuition Unit Pricing Schedule and Calculator allow you to view information comparing the current redemption value of different types of units at Texas public colleges and universities.

How Far Do the Tuition Units Go?

Any type of Tuition Unit can be redeemed for tuition and required fees at any Texas public two-year or four-year college or university. Compare how many units are currently needed to pay for a semester of tuition and required fees at selected Texas two- and four-year public colleges and universities.

4-Year or 2-Year University/College

Tuition and Required Fees 2014-2015 Academic Year

# of Units Required

Type I

Type II

Type III

UT-Dallas 2014 Guaranteed

$11,806.00

100.00

132.03

531.08

UT-Austin Business

$10,738.00

90.95

120.08

483.04

UT-Arligton Liberal Arts

$9,148.00

77.49

102.3

411.52

Texas Tech University

$9,307.60

78.84

104.09

418.70

University of North Texas

$9,705.40

82.21

108.54

436.59

UT- San Antonio

$8,737.30

74.01

97.71

393.04

Angelo State University

$7,642.40

64.73

85.47

343.79

University of Houston-Downtown

$6,614.00

56.02

73.97

297.53

Blinn College Brenham and Bryan(In-District Resident)

$2,670.00

22.62

29.86

120.11

* Number of units required for 30 semester hour academic year

See the calculator for more information on redemption value at other Texas public colleges and universities.

Fitting the Plan to Your Needs, Goals and Budget

Here are some commonly cited examples of how to customize the Plan to your circumstances.

Scenario 1

I have the resources to prepay for my child’s four-year college tuition at a Texas public college or university. I like the idea of prepaying tomorrow’s tuition at today’s prices and I don’t want to worry about having to pay additional costs for tuition and required fees when my child starts school.

Options: A lump sum payment for 400 Type I Tuition Units will purchase tuition and required fees for four academic years of 30 semester credit hours each at up to the most expensive Texas public college or university. If your child goes to a less expensive Texas public school, fewer units would need to be redeemed for 30 semester credit hours.

Comments: If the units are used at a Texas private college or university, career school, or out-of-state school where tuition and required fees are not locked in, the redemption value would be based on the Transfer Value.

Scenario 2

My budget is very tight, but I would like to get started saving for my child to go to college.

Options: The Pay-As-You-Go option allows you to contribute as much as you can whenever you can. You must first establish an account by paying the $25 administrative fee and purchasing at least one unit of any type. Then you can send payments at whatever frequency and amount that works for your budget, as long as each payment is at least $15.

Comments: While the Pay-As-You-Go Plan offers the flexibility to purchase Tuition Units on your schedule, the price will be based on the Tuition Unit price in effect when your payment is received, and will change from enrollment period to enrollment period.

Scenario 3

Based on my budget, I have a set amount that I can contribute each month to save for my child’s college. Is there a way for me to lock-in today’s tuition prices, but pay for the Tuition Units over an extended period of time? If so, how long do I have to pay for the units?

Options: You can open an installment contract, which will allow you to lock-in today’s prices. You will pay a finance charge of 8% in addition to the unit price. You can finance the account for five years, 10 years, or the number of years until your child is projected to graduate from high school.

Comments: There is no prepayment penalty for early payment. If you pay the account off early, the finance charge is reduced based on the number of remaining payments at the time of prepayment.

Scenario 4

I received a tax refund and would like to spend a specified amount today to purchase however many Tuition Units I can. Then I would like to add additional units in the future as funds become available. Is that possible?

Options: You can purchase tuition units today based on the Lump Sum amount that you have to spend now and then continue to add to the account over time with the Pay-As-You-Go Plan as funds are available.

Comments: While the Pay-As-You-Go Plan offers the flexibility to purchase Tuition Units on your schedule, the price will be based on the Tuition Unit price in effect when your payment is received, and will change from sales period to sales period.

Scenario 5

Is there a way that other family members or friends can help purchase Tuition Units for my child?

Options: There is a gifting and contribution form, which you can send to family members or friends to let them know how to contribute to your child’s account.

Comments: You must first establish an account by paying the $25 administrative fee and purchasing a minimum of one unit of any type. Account holders retain sole control of the account.

Scenario 6

Does it matter what type of units I purchase?

Options: Any type of units can be redeemed at any Texas public college or university. The number of units required will vary depending on the college or university that your child attends. For more information on the number of units required for Texas public schools today, see the Academic Year Tuition Unit Pricing Schedule.

Comments: If the units are used at a Texas private college or university, career school, or out-of-state school where tuition and required fees are not locked in, the redemption value would be based on the Transfer Value.

Scenario 7

My child might go to a Texas public two-year community college and then to a Texas public four-year college.

Options: Consider purchasing 200 Type III Units for two academic years of 30 semester credit hours each at a community college and 200 Type I or II Units for two academic years of 30 semester credit hours each at a four-year college.

Comments: Type II and III Units pay the Weighted Average value of public four-year and two-year, respectively, public colleges and universities. If the child attends a school above the Weighted Average value, an additional amount must be paid by the Purchaser or Beneficiary to the school or additional units must be redeemed. The redemption value of Type III Units is based on in-district resident status.

This material is provided for general and educational purposes only and is not intended to provide legal, tax or investment advice, or for use to avoid penalties that may be imposed under U.S. federal tax laws. Contact your attorney or other advisor regarding your specific legal, investment or tax situation.

The Texas Tuition Promise Fund® is established and maintained by the Texas Prepaid Higher Education Tuition Board and distributed by Northern Lights Distributors, LLC, Member FINRA, SIPC. NorthStar Financial Services Group, LLC, the parent company of Northern Lights Distributors, LLC, is the Plan manager and administrator of the Plan.

Some states offer favorable tax treatment to their residents only if they invest in the state’s own 529 plan. Purchasers who are non-residents of Texas should consider whether their home state offers its residents a 529 plan with alternative tax advantages and should consult their tax advisor.

Contracts in the Plan are not deposits or other obligations of any depository institution. Neither a contract nor any return paid with a refund is insured or guaranteed by the FDIC, the state of Texas, the Texas Prepaid Higher Education Tuition Board, any other state or federal governmental agency or NorthStar or its affiliates. The contracts have not been registered with the U.S. Securities and Exchange Commission or with any state.

Purchasers should carefully consider the risks, administrative fees, service and other charges and expenses associated with the contracts, including Plan termination and decreased transfer or refund value. The Plan Description and Master Agreement contains this and other information about the Plan and may be obtained by visiting www.texastuitionpromisefund.com or calling 1.800.445.GRAD (4723), Option #5. Purchasers should read these documents carefully before purchasing a contract.

Comments or complaints may be forwarded to the Prepaid Higher Education Tuition Program, Office of the Comptroller of Public Accounts, at P.O. Box 13407, Austin, Texas 78711-3407, or at 1.512.936.2064.